Microsoft, HP join up for packaged cloud services

Updated 12:29 p.m.: Added further information from another interview and a correction on the private-cloud infrastructure.

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Microsoft and Hewlett-Packard will collectively invest $250 million in developing and selling packaged business and cloud products, running Microsoft software on HP hardware, the companies announced Wednesday morning.

Executives heralded the non-exclusive three-year deal as the companies’ deepest-ever collaboration. The companies will work together on research and development, engineering and sales to “take a complex product and make it simple,” Mark Hurd, HP’s chairman and chief executive, said in a media conference call.

“This is all about delivering these products to make them as close to plug-and-play as we can,” he said.

Microsoft CEO Steve Ballmer said the impetus was cloud computing. The partnership provides an option for buying private-cloud systems, in addition to offering simplified deployment of the Windows Azure public-cloud platform.

As it prepares to fully deploy and monetize its Windows Azure public-cloud platform on Feb. 1, Microsoft has faced criticism for not offering private- or hybrid-cloud products. The Redmond-based company trails cloud-computing leaders such as Amazon and virtualization leaders such as VMware.

Cloud computing is a quickly growing market. In public clouds, businesses can build, manage and scale applications and services that are hosted at data centers owned by a third party – generally the cloud provider. With private clouds, those applications and services are hosted at a company’s own data center.

2. Management
HP’s system-management software – namely, Insight Software and Business Technology Optimization – will be integrated with Microsoft System Center. The companies say that will streamline management of Microsoft and non-Microsoft operating systems and applications.

3. Business Applications
The companies will offer pre-packaged bundles of e-mail and collaboration applications, such as Microsoft Exchange, and database software such as Microsoft SQL Server.

4. Cloud
Microsoft will continue to use HP hardware to host its Azure public cloud, and HP will offer extra services for the platform. Customers will be able to buy software-hardware bundles that are nearly ready for Azure cloud-application deployments.

The private-cloud offerings are built on the companies’ management solutions, such as Microsoft System Center, HP Insight Software and HP Business Technology Optimization, said Jess Carlat, HP’s director of marketing, infrastructure, software and blades.

“This is really a fundamental element to getting customers to be able to deploy (private) cloud architecture,” Carlat said.

Dave Donatelli, executive vice president and general manager of Enterprise Servers and Networking for HP’s Enterprise Business, said the partnership could be looked at as not just a marriage of software services, but a marriage of cloud infrastructure.

“Really stitching those things together, it’s been kind of a goal for a long time,” Ballmer said in the conference call.

The companies said they’ve committed an incremental investment of $250 million, but did not break down the costs. Though some solutions are already available, potential customers should expect many new product launches over the next three years, Hurd said.

There will be dedicated joint sales and marketing staffs to work with large enterprises, medium-sized companies and small businesses. The packaged products will include Microsoft’s Hyper-V virtualization server software, but it will not be the default, Donatelli said.

The packaging of HP and Microsoft products together for private-cloud deployment is “breakthrough stuff” for the companies, Hurd said.

The two chief executives, Ballmer and Hurd, said they came up with the plan during a meeting in April. They said it was not in response to cloud-computing shakeups such as Oracle acquisition of Sun Microsystems, which was announced April 20.

“In a sense, this is entirely cloud-motivated,” Ballmer said. “It is absolutely cloud-driven.”